Secret Report Says Insurgency Is Self-Sustaining

Posted on Nov 26, 2006

A classified U.S. government report leaked to The New York Times says the insurgency in Iraq has funds to sustain itself annually, thanks to oil smuggling, kidnapping and other nefarious activities. What’s more, the report finds insurgents may have enough money left over to finance terrorist activity outside Iraq—all while spending less in a year than the U.S. spends per day.

New York Times:

The report offers little hope that much can be done, at least soon, to choke off insurgent revenues. For one thing, it acknowledges how little the American authorities in Iraq know—three and a half years after the invasion that toppled Saddam Hussein—about crucial aspects of insurgent operations. For another, it paints an almost despairing picture of the Iraqi government’s ability, or willingness, to take steps to tamp down the insurgency’s financing.

“If accurate,” the report says, its estimates indicate that these “sources of terrorist and insurgent finance within Iraq—independent of foreign sources—are currently sufficient to sustain the groups’ existence and operation.” To this it adds what may be its most surprising conclusion: “In fact, if recent revenue and expense estimates are correct, terrorist and insurgent groups in Iraq may have surplus funds with which to support other terrorist organizations outside of Iraq.”

Some terrorism experts outside the government who were given an outline of the report by the Times criticized it as imprecise and speculative. Completed in June, the report was compiled by an interagency working group investigating the financing of militant groups in Iraq.

A Bush administration official, who spoke on condition of anonymity, confirmed the group’s existence. He said it was led by Juan Zarate, deputy national security adviser for combating terrorism, and was made up of about a dozen people, drawn from the C.I.A., the F.B.I., the Defense Intelligence Agency, the State Department, the Treasury Department and the United States Central Command.

The group’s estimate of the financing for the insurgency, even taking the higher figure of $200 million, underscores the David and Goliath nature of the war. American, Iraqi and other coalition forces are fighting an array of shadowy Sunni and Shiite groups that can draw on huge armories left over from Mr. Hussein’s days, and benefit from the willingness of many insurgents to fight with little or no pay. If the $200 million a year estimate is close to the mark, it amounts to less than what it costs the Pentagon, with an $8 billion monthly budget for Iraq, to sustain the American war effort here for a single day.